BLOG: 3 barriers between Amazon Web Services and businesses

David Linthicum |
Oct. 10, 2013

Amazon Web Services is a huge success, but three obstacles have slowed enterprise adoption of the No. 1 cloud provider

Amazon Web Services' Re:Invent 2013 conference is coming up next month in Las Vegas, and I can already tell you it will sell out and be a big hit. Why? Amazon had a huge lead in the market, everyone knows it, and both customers and partners alike will show up to pay homage.

The success is well deserved. AWS didn't get to where it is through clever marketing. It simply has a public cloud that works, scales, and lives up to expectations. Sometimes, that's all you need.

However, although AWS has done well with companies with less than $1 billion in revenue, larger enterprises are still slow on the uptake when it comes to AWS. Creating larger enterprise agreements with AWS does not seem to be as easy as many organizations would have thought, partly due to three concepts AWS doesn't seem to understand:

1. Enterprises always want a deal. AWS typically does not budge on pricing, even in enterprise agreements, although many enterprises try to push back on AWS. This typically means the tech team brings the agreement to procurement, which puts its hat out in an attempt to obtain a discount. In some cases, procurement goes back to tech and says, "No can do — pick another provider."

2. Enterprises always want a one-sided contract. AWS also does not budge on its SLAs. Enterprises typically want to rewrite these agreements to protect themselves, and technology providers normally sign them after some back and forth with the lawyers. Not Amazon.

3. Enterprises don't get utility-based computing. Computers are purchased, and data center space is rented — clear, tangible expenses in a budget. By contrast, the public cloud model is a difficult concept for enterprises to understand and to deal with, given their static business processes. Public cloud providers need to take steps to make sure they fit their square pegs into the enterprises' round holes and not upset the apple cart too much. AWS does not appear to take utility-based computing mindsets into account.

AWS, as well as other cloud providers, will eventually figure it all out when it comes to dealing with enterprises. However, until then, we're in for a rough period as AWS learns more about the enterprise and as enterprises learn more about public cloud computing.